Governor's race in Indiana

(CNN) -- Republican challenger Mitch Daniels will unseat Democrat Joe Kernan to become Indiana's governor, according to a CNN projection.

The race in Indiana between the incumbent and Daniels, former director of the Office of Management and Budget for President George W. Bush, had been tight down to the wire.

A few polls in the final weeks of the campaign showed Daniels with a slight lead among Hoosiers likely to vote. The close race was indicative of two colliding political trends in the state. While the Democrats held a 16-year lock on the governor's mansion, Indiana had voted solidly for Republican presidential candidates for 36 years.

Kernan, who was Indiana's lieutenant governor for eight years, had talked about retiring to private life in January 2005. But he stepped in as governor following the unexpected death of Democratic Gov. Frank O'Bannon last September.

The Kernan-Daniels matchup jumped into the national spotlight, as both President Bush and Vice President Cheney campaigned in Indiana on Daniels' behalf. Cheney made at least two visits, raising some $400,000 on one trip.

The economy emerged as a major issue in the campaign. As the incumbent, Kernan took heat for the state's budget crunch, as well as state spending cutbacks and tax increases implemented during previous Democratic administrations.

In an Indianapolis Star-WTHR (Channel 13) poll conducted toward the end of the campaign, 82 percent of those polled said improving the state's jobs picture was a critical issue in the governor's race. Forty-five percent responded that Daniels would do a better job with the economy than Kernan, who was supported by 35 percent of respondents.

The tenor of the campaign stayed positive, considering the stakes. Daniels stepped in and stopped the state GOP from running a series of attack ads on Democratic mismanagement of the budget, preferring to run his own series of positive, biographical ads highlighting his experience as the nation's budget director, a fiscal conservative and a Bush ally. Daniels also emphasized his travels across the state.

Kernan also stuck to positive ads, highlighting his military service in Vietnam, his bipartisanship, his support for business and property tax cuts and his desire to eliminate government waste.

Both candidates were well funded by Indiana standards, and Daniels received a financial boost from his endorsement and fund-raising support from the White House. He even named his web site, www.mymanmitch.com, a reference to a statement Bush made about him.